TMI Blog2004 (1) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... Employers' contribution 6,80,291 9,86,628 12,67,760" 5. It was submitted before the learned CIT(A) that amount of Rs. 1,20,649 out of Rs. 2,81,132 relating to bonus payable was paid by the assessee before the due date for filing of the return under s. 139(1) of the Act and, therefore, no disallowance should be made to this extent. The assessee also submitted that evidence regarding payment of Rs. 1,20,649 was filed during the course of assessment proceedings and, therefore, there was no justification even to disallow this amount. 6. So far as disallowance of Rs. 9,86,628 was concerned, the assessee submitted following details: S. No. Month Employees contribution(Rs.) Employer s contribution(Rs.) Total(Rs.) Amount deposited(Rs.) Date of deposit 1. Feb. 88 55,258.80 1,22,732.35 1,77,991.15 1,77,962 21.3.88 2. Apr. 88 46,137.05 1,01,334.60 1,47,471.65 1,46,935 21.5.88 3. May 88 45,838.80 1,03,010.35 1,48,849.15 1,49,365 21.6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in this reply that sales-tax to the tune of Rs. 20,68,659 was paid on the close of the business hours of31st March, 1989, and this amount has been paid to the Government Treasury within the said date. It was explained that this amount was payable by15th Nov., 1989, but the same was paid before31st Dec., 1989. The learned counsel also placed reliance on the following decisions in support of his arguments raised before us: (1) CIT vs. Jayant Patel (2000) 163 CTR (Mad) 367 : (2001) 248 ITR 199 (Mad) (2) CIT vs. Trehan Enterprises (2001) 168 CTR (J K) 274 : (2001) 248 ITR 333 (J K) 9. The learned Departmental Representative, on the other hand, supported the order of the learned CIT(A). 10. We have carefully considered the entire material on record. In the Board's Circular No. 669, dt.25th Oct., 1993, after making reference to the earlier Circular No. 581, dt. 28th Sept., 1990, it has been clarified that if the sums referred in the first proviso to s. 43B had in fact been paid on or before due dates mentioned therein, but evidence therefor had been omitted to be furnished along with return, then the AO can entertain applications under s. 154 of the Act for rectification of int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 36-37. It has been argued by the learned Authorized Representative of the assessee-appellant that no amount has been allowed by the AO no by CIT(A) for the employees participation in the business meetings not hit by s. 37(2)(A) against which assessee-appellant is again in appeal before the Tribunal. The learned Departmental Representative has relied on the order of the CIT(A). Following the Expo Machinery case, we allowed 35 per cent deduction for employees participation. It is not denied by the Revenue that the employees have not at all participated." 18. In our view, therefore, the issue stands covered by the above decision of the Tribunal in favour of the assessee. Hence, ground No. 3 is allowed partly in favour of the assessee. Ground No. 4: 19. Ground No. 4 is directed against the sustenance of disallowance of prior period expenses of Rs. 1,32,759 out of adjustments relating to earlier years amounting to Rs. 17,46,023. 20. The learned CIT(A) has considered the issue in paras 23 and 24 of his order. He has rejected the plea of the assessee by observing that in the year under appeal nothing was brought on record to justify that the prior period expenses had crystalli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Advertisement charges on account of construction of public school for policemen's children 25,000 5. Tickets for Prime Minister Relief Fund at Nehru Stadium show 18,000 24. It was submitted on behalf of the assessee that the Departmental authorities have segregated this expenditure out of expenditure of advertisement and publicity. In this regard, our attention was invited to pp. 44 to 57 of the paper book which contain full particulars of these expenses. It was submitted by the learned counsel for the assessee that these expenses were incurred in connection with publicity and advertisement of the company through banners in the cricket stadium and other sports events, and, therefore, are in the nature of revenue expenses which were incurred for carrying out business of the assessee-company, and the same are to be allowed. 25. The learned CIT(A) has considered the issue in paras 25 to 29 of his order and he has confirmed the disallowance to the extent of Rs. 76,625 by observing as under: "29. Regarding the amount of Rs. 21,500 spent on permanent seat allocation in the stadium, amount of Rs. 5,000 spent on new year celebration, amount of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by earlier order of Tribunal in assessee's own case for immediately preceding asst. yr. 1986-87 in cross-appeals being ITA Nos. 3340 and 3286/Del/1992, dt.6th July, 2001. For the very same reasons the issue is decided in favour of assessee." 30. In view of the above, the issue stands covered in favour of the assessee by the abovementioned order of the Tribunal and, therefore, this ground stands allowed in favour of the assessee. Ground No. 7: 31. This ground is directed against the directions of the learned CIT(A) for restoring certain matters to the AO. 32. At the time of hearing, the learned counsel for the assessee withdrew this ground. Otherwise also, since the learned CIT(A) had restored the matter to the AO, no grievance is caused to the assessee. In view of the above, this ground is rejected. 33. In the result, assessee's appeal is partly allowed. ITA No. 7594/De/1992: Ground No. 1: 34. This ground is directed against deletion of disallowance of Rs. 35,917 being premium on keyman insurance policy. 35. The learned CIT(A) had decided the issue by following the orders of the earlier years in the case of the assessee and also by following the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee by upholding the order of the learned CIT(A) and by observing as under: "6. Ground No. 4 relates to the alleged error of the CIT(A) in holding that the total visits of an employee outside headquarters during the year should be considered in a composite manner in working out the disallowance under r. 6D of the IT Rules, 1962, Concerned order of the AO is at pp. 17 to 19 and that of the CIT(A) is at pp. 7 and 8. Very fairly the learned Authorized Representative for the assessee has pointed out that this ground is covered against the assessee by the order of the above Tribunal for asst. yr. 1987-88 in ITA No. 4722/Del/1992. Concerned order is at pp. 1-2. Nothing contrary has been pointed out by the learned Departmental Representative. Hence, we decide this ground accordingly." 39. The learned counsel for the assessee submitted that the issue has been recently considered by the Hon'ble Calcutta High Court in the case of CIT vs. General Electric Co. India Ltd. (2002) 175 CTR (Cal) 1 : (2002) 255 ITR 22 (Cal) and, therefore, in view of the latest decision, the issue should be decided in favour of the assessee, and the direction of the learned CIT(A) should be upheld. 40. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , one relating to travel and the other relating to actual stay at the place of destination and, therefore, limitation provided under r. 6D(2) of the IT Rules covers the entire expenditure incurred by an employee, both at actual travelling as well as during the period of stay at any particular place, for the purpose of business. 44. In the case of South India Shipping Corpn. Ltd. vs. CIT, the Hon'ble Madras High Court has held that the disallowance under r. 6D of IT Rules would take into account all the expenses incurred by the assessee during the entire period of absence of its employees from the headquarters. In taking this view, the Hon'ble Madras High Court has followed its earlier decision in the case of R.K. Swami Advertising Associates (P) Ltd. vs. CIT (1998) 147 CTR (Mad) 332 : (1996) 220 ITR 507 (Mad). 45. So far as the decision in the case of CIT vs. General Electric Co. India Ltd. is concerned, the Hon'ble Calcutta High Court has considered the issue relating to clubbing of journey and held that the words "aggregate of the amounts" mentioned in r. 6D of the IT Rules refers to the aggregate for the assessment year and not to a particular trip and if the expenditure was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the order of the CIT(A) and reject this ground of appeal." 53. In view of the above, the issue is squarely covered in favour of the assessee by the order of the Tribunal. Hence, we do not find any scope to interfere in the order of the learned CIT(A). Consequently, the ground taken by the Revenue is rejected. Ground No. 4: 54. This ground relates to the allowability of entertainment expenditure. 55. We have considered this issue while deciding ground No. 3 in ITA 7678/Del/1992 in the appeal of the assessee and have allowed the ground in favour of the assessee. The relevant discussions on this issue are in paras 13 to 18 of the order. Thus, we uphold the order of the learned CIT(A) on this issue and reject this ground of the Revenue. Ground No. 5: 56. This ground is directed against allowing of deduction of Rs. 6,56,671 being cost of construction of scoreboard installed at Nahar Singh Stadium and sum of Rs. 39,400 being professional fee incurred in this regard. 57. The learned CIT(A) had restored this issue to the file of the AO for deciding the issue afresh. The relevant observations of the learned CIT(A) in this regard are contained in para 27 of his order wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the expenses incurred on these items cannot be treated to be of capital nature as these expenses were incurred for smooth functioning of appellant's business activities with a view to improve the efficiency. In taking this view, he has sought support from various decisions also. The learned CIT(A) has also directed to withdraw depreciation allowed to the assessee on these items. 62. The learned counsel for the assessee invited our attention to the summarized statement which is available at p. 13 of the paper book. He also made reference to relevant vouchers and enclosures. 63. After considering the entire material to which our attention was invited by the learned counsel for the assessee, we find that the learned CIT(A) was fully justified in treating the expenditure for business purposes. We, therefore, uphold the view taken by him. Hence, this ground of the Revenue stands rejected. Ground No. 7: 64. This ground is directed against deleting the disallowance of Rs. 1,05,654 made by the AO on account of unverifiable nature of the claim. The learned CIT(A) has considered the issue in para 36 of his order. He had deleted the disallowance by reversing the findings of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vance paid. 70. The learned counsel also pointed out that the remaining amount was not recovered as cost related to the parts. 71. We have considered the entire material on record. There is no dispute that the expenditure was for business purposes. Further, similar expenditure was allowed in earlier year by the learned CIT(A) and Department has not filed any appeal, and the fact submitted by the learned counsel was not controverted by the learned Departmental Representative. In view of these facts, the Department is required to maintain consistency to adopt same approach in this assessment year also. Hence, the deletion of disallowance is justified, in our view. We, therefore, uphold the order of the learned CIT(A) on this issue. Ground No. 9: 72. This ground is directed against deletion of disallowance of Rs. 40,40,121 on account of technology transfer fee. 73. The learned CIT(A) has considered this issue in paras 38 to 40 of his order and directed the AO to allow the claim of the assessee. 74. The learned Departmental Representative has supported the order of the AO. On the other hand, the learned counsel for the assessee has placed reliance on the order of the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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